Stock slump continues; Nasdaq closes down 1.2%

USA Today and USAToday , KARE3:33 PM. CDT April 07, 2014

NEW YORK, NY - MARCH 28: Traders work on the floor of the New York Stock Exchange on March 28, 2014 in New York City. The Dow Jones industrial avererage was up over 100 points in afternoon trading. (Photo by Spencer Platt/Getty Images)(Photo: Spencer Platt Getty Images)

NEW YORK - Stocks started the new week where the last one left off, with major market indexes dropping again.

The weakness that kicked in late last week in the stock market, which started with the air coming out of one-time highflyers in the biotech and Internet space, has persisted to start the new week.

The Nasdaq composite index continued to lead the overall market lower and plunged 48 points, or 1.2%, to 4,080, according to preliminary calculations. On top of it's 2.6% drop Friday, the Nasdaq is suffering through its worst three-day skid since November 2011.

The Dow Jones industrial average was down 167 points, or 1%, to 16,246. The Standard & Poor's 500 index fell 20 points, or 1.1%, to 1,845.

Small-company shares also are getting pummeled again. The Russell 2000 stock index, which had been a market leader until the recent selloff, is down 1.2% to 1140.

Gary Kaltbaum, president of money-management firm Kaltbaum Capital Management, describes the carnage of imploding biotech and Internet stocks, once high-flying "growth" names in the Nasdaq composite, that have come crashing down to earth: "The best we can describe what we have been recently seeing in 'growth-land' is a 50-car pileup," Kaltbaum told clients in a morning research note.

Investors will start focusing on the outlook for corporate earnings this week, as companies begin to report first-quarter results. Aluminum maker Alcoa, JPMorgan and Wells Fargo are reporting. Companies are expected to report earnings growth of 0.3% over last year's first quarter. That rate of growth, however, is down from 8% in the fourth quarter, and would be the lowest since the third quarter, when earnings contracted 1.7%, according to S&P Capital IQ.

The Nikkei 225 ended down 254.92 points, or 1.7%, to 14,808.85; the Hang Seng index was off 166.27 points, or 0.7% to 22,343.81; and the Shanghai composite was up 15.13 points, or 0.7% to 2,058.83 points.

European benchmarks were also hit hard Monday, with Britain's FTSE 100 closing down 1.1%, Germany's DAX diving 1.9% and France's CAC-40 down 1.1%.